International donors out, local donors hesitate so Latin American NGOs feel the pinch

Despite the fact that many Latin American countries have weathered the global financial storm reasonably well, NGOs in the region are struggling or closing as sources of funding from at home and abroad dry up. In Mexico, many of the 30,000 NGOs are facing serious financial difficulties. Acording to Lorena Cortés, head of research at the Mexican Center for Philanthropy (CEMEFI), ‘the national economic crisis is the underlying problem’. Their difficulties are exacerbated by the country’s proximity to the United States: the volume of bilateral trade between the two means that Mexico has suffered badly from the effects of the recession.

However, paradoxically, NGOs in some countries have suffered because of the success of their countries’ economies. A survey of international donors recently carried out by two Brazilian organizations shows that of 41 European and US donors who responded, one has already stopped investing in Brazil and six plan to do so by 2015. A study by the Brazilian Association of NGOs (ABONG) also reveals a 50 per cent drop in international funding from 2009 to 2010. Explaining the decline, most of the donors surveyed mentioned a change in regional priorities, a change in strategy, Brazil’s relatively high level of development, and the country’s increased funding capacity. But the primary reason cited was the economic crisis. According to Martin Pascual of the Chilean Association of NGOs (ACCION), withdrawal of foreign donor support is premature and misplaced. ‘Latin America’s main problem may not be poverty, but it is inequality’, he told IPS news. This reflects vulnerabilities that can give rise to ‘setbacks’, and even a weakening of democracy, he said.

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